INDIANA, Pa., July 18 /PRNewswire-FirstCall/ -- S&T Bancorp, Inc.
(Nasdaq: STBA - News) today announced net income of $11.2 million or $0.43 diluted
earnings per share for the second quarter of 2006, compared to $15.5 million
net income and $0.58 diluted earnings per share for the second quarter ended
June 30, 2005.
For the six months ended June 30, 2006, net income totaled $25.5 million,
and diluted earnings per share was $0.97, as compared to $29.3 million of net
income and $1.09 diluted earnings per share for the six months ended June 30,
2005, representing a 13 percent and an 11 percent decrease, respectively.
Annualized return on average equity for the six months ended June 30, 2006
was 14.62 percent as compared to 16.86 percent in the year ago period and
16.57 percent for the full year 2005. Year-to-date annualized return on
average assets through June 30, 2006 was 1.58 percent compared with 1.95
percent in the first half of 2005 and 1.90 percent for the full year 2005.
James C. Miller, chairman and chief executive officer, commented, "The
primary cause of our disappointing earnings performance this quarter was the
addition of $5.7 million to the provision for loan loss related to the
deterioration in the credit quality of three commercial loan relationships.
The loan loss provision expense for the quarter ending June 30, 2006 is $4.2
million higher than the $1.5 million we experienced for the first quarter of
this year and $6.0 million more than the $0.3 million negative provision to
the loan loss reserve during the second quarter of 2005. While our list of
impaired and watch-list loans remains very manageable, we did see some
significant deterioration in a few weaker credits. In addition, we recorded a
$0.7 million expense to charge-down the value of a commercial property that
had been acquired through foreclosure in the fourth quarter of 2005 based upon
current market and property conditions."
Nonperforming assets totaled $24.5 million or 0.74 percent of total assets
at June 30, 2006 as compared to $16.1 million or 0.50 percent at March 31,
2006 and $14.9 million or 0.47 percent at December 31, 2005. Net loan charge-
offs for the first six months of 2006 were $5.2 million or 0.41 percent of
average loans on an annualized basis compared to $0.3 million or 0.02 percent
for the first six months of 2005.
The allowance for loan losses at June 30, 2006 was $38.6 million or 1.47
percent of total loans, as compared to $37.4 million or 1.47 percent at March
31, 2006 and $36.6 million or 1.47 percent at December 31, 2005. Included in
the allowance for loan losses at June 30, 2006 is $9.7 million of specific
reserves for impaired loans, the majority of which is associated with one
commercial loan relationship. For the six months ended June 30, 2006, the
provision for loan losses was $7.2 million as compared to $0.5 million for the
six months ended June 30, 2005. The provision, which is based upon
management's detailed quarterly analysis of the adequacy of the allowance for
loan losses, is directionally consistent with the decline in asset quality and
the increase in net charge-offs and nonaccrual loans.
Net interest income on a fully taxable equivalent basis for the second
quarter of 2006 was $29.2 million, a decrease of $0.1 million or 1 percent, as
compared to $29.3 million for the same period of 2005. Net interest income on
a fully taxable equivalent basis for the six months ended June 30, 2006 was
$58.4 million, a $0.7 million or 1 percent increase, compared to $57.7 million
for the six months ended June 30, 2005. The net interest margin, on a fully
taxable equivalent basis for 2006, was 3.82 percent, 3.93 percent and 3.88
percent for the second quarter, first quarter and six months ended June 30,
respectively. For the same periods in 2005, the net interest margin was 4.10
percent, 4.08 percent and 4.09 percent, respectively. Also affecting net
interest income is a $0.5 million and a $0.7 million increase in delinquent
interest reversals for the three-month and six-month periods ending June 30,
2006, respectively.
Earning assets have increased $179.0 million over the past 12 months,
primarily driven by a $168.5 million or 9 percent increase in commercial
lending and a $65.3 million or 12 percent increase in consumer lending.
Investment securities were reduced over the same 12-month period by $54.6
million as the risk reward opportunities for leveraging activities have been
significantly reduced by a flat yield curve. Deposits increased $288.7
million or 13 percent over the same period.
Miller stated, "Our relationship banking strategy continues to be the
driving force behind our growth. Providing ancillary services to our
commercial customers, such as wealth management, cash management, insurance
and retail-related products, has contributed to significant improvements in
noninterest revenues. Continuing to expand core deposit funding for our
commercial lending growth also is an important component of that strategy."
During the past 12 months, S&T has opened new or expanded existing branch
facilities in the Armstrong, Blair, Butler and Westmoreland County markets.
Several new facilities are also planned for the upcoming year.
Noninterest revenue, excluding investment security gains, increased 12
percent or $2.0 million to $17.8 million for the six-month period ended June
30, 2006, as compared to $15.8 million for the same year ago period, due to
revenue increases in retail services, wealth management, insurance, letters of
credit and debit/credit card activities.
Net equity investment security gains for the first half of 2006 were $3.1
million, a $0.6 million increase from the same period of 2005 due to more
market opportunities this period. The equity securities portfolio has a
market value of $58.5 million and net unrealized gains of $17.8 million as of
June 30, 2006, as compared to $67.6 million and $20.9 million, respectively,
at June 30, 2005.
Noninterest expense increased $2.6 million or 8 percent to $34.2 million
for the first six months of 2006, as compared to $31.6 million for the 2005
period. Part of the increase is staff related as a result of the effect of
year-end merit increases, the addition of 21 full-time equivalent staff to
implement new strategic initiatives and staff retail facilities, higher
commission payments on wealth management and insurance sales, and $0.4 million
related to the adoption of Financial Accounting Standards Board Statement No.
123®, "Share-Based Payment." Occupancy and equipment expense decreased $0.2
million during the six-month period as a result of several facility
restructurings and additions that occurred during the first half of 2005.
Also affecting noninterest expense during 2006 is a $0.5 million donation made
to the S&T Charitable Foundation and a $0.7 million charge-down on the
aforementioned commercial property acquired through foreclosure. The
efficiency ratio, which measures noninterest expense to noninterest income,
excluding security gains, plus net interest income on a fully taxable
equivalent basis, was 45 percent and 43 percent for the six-month periods
ended June 30, 2006 and June 30, 2005, respectively.
S&T Bancorp, Inc. declared a common stock quarterly dividend of $0.29 per
share on June 19, 2006 which is payable on July 25, 2006 to shareholders of
record as of June 30, 2006. This dividend represents a 3.6 percent increase
over the $0.28 per share quarterly dividend declared a year ago and a 3.5
percent projected annual yield utilizing the June 30, 2006 closing market
price of $33.23. The S&T Bancorp, Inc. Board of Directors also authorized
stock buyback programs in 2005 and 2006 of 1 million shares, or approximately
4 percent of shares outstanding in each year. During 2005, S&T repurchased
660,400 shares through this program at an average cost of $35.09 per share.
During 2006, S&T has repurchased 604,000 shares at an average price of $35.51.
Headquartered in Indiana, Pa., S&T Bancorp, Inc. operates 50 offices
within Allegheny, Armstrong, Blair, Butler, Cambria, Clarion, Clearfield,
Indiana, Jefferson and Westmoreland counties. With assets of $3.3 billion,
S&T Bancorp, Inc. stock trades on the NASDAQ Global Select Market under the
symbol STBA.
This information may contain forward-looking statements regarding future
financial performance which are not historical facts and which involve risks
and uncertainties. Actual results and performance could differ materially
from those anticipated by these forward-looking statements. Factors that
could cause such a difference include, but are not limited to, general
economic conditions, changes in interest rates, deposit flows, loan demand,
asset quality, including real estate and other collateral values, and
competition. This information should be read in conjunction with the audited
financial statements and analysis as presented in the Annual Report on Form
10-K for S&T Bancorp, Inc. and subsidiaries.
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2006
(Dollars in thousands
except per share data)
2005
March June September December
For the period: 1Q 2Q 3Q 4Q
Interest Income $39,466 $42,144 $44,035 $46,476
Interest Expense 12,148 13,780 15,595 17,991
Net Interest Income 27,318 28,364 28,440 28,485
Taxable Equivalent
Adjustment 975 1,002 1,024 1,041
Net Interest
Income (FTE) 28,293 29,366 29,464 29,526
Provision For Loan Losses 800 (300) 3,000 1,500
Net Interest Income
After Provisions (FTE) 27,493 29,666 26,464 28,026
Security Gains, Net 1,668 801 1,300 1,239
Service Charges and Fees 2,181 2,338 2,504 2,564
Wealth Management 1,643 1,831 1,760 1,743
Insurance 1,403 1,387 1,403 1,492
Other 2,196 2,829 2,440 2,663
Total Other Income 7,423 8,385 8,107 8,462
Salaries and Employee
Benefits 8,798 8,440 8,754 8,723
Occupancy and Equip.
Expense, Net 2,290 1,939 1,892 1,946
Data Processing Expense 1,035 1,092 1,046 1,117
FDIC Expense 74 75 71 72
Other 3,881 3,940 2,899 4,380
Total Other Expense 16,078 15,486 14,662 16,238
Income Before Taxes 20,506 23,366 21,209 21,490
Taxable Equivalent
Adjustment 975 1,002 1,024 1,041
Applicable Income Taxes 5,711 6,871 5,818 5,886
Net Income $13,820 $15,493 $14,367 $14,563
Per Common Share Data:
Shares Outstanding at End
of Period 26,584,029 26,200,529 26,364,095 26,270,730
Average Shares Outstanding
- Diluted 26,951,090 26,644,682 26,618,216 26,542,511
Net Income - Diluted $0.51 $0.58 $0.54 $0.55
Dividends Declared $0.28 $0.28 $0.28 $0.29
Book Value $13.06 $13.09 $13.35 $13.41
Market Value $35.40 $36.10 $37.80 $36.82
2006 Six Months Ended
March June June June
For the period: 1Q 2Q 2006 2005
Interest Income $47,884 $50,957 $98,841 $81,611
Interest Expense 19,810 22,830 42,640 25,928
Net Interest Income 28,074 28,127 56,201 55,683
Taxable Equivalent
Adjustment 1,068 1,117 2,185 1,978
Net Interest
Income (FTE) 29,142 29,244 58,386 57,661
Provision For Loan Losses 1,500 5,700 7,200 500
Net Interest Income
After Provisions (FTE) 27,642 23,544 51,186 57,161
Security Gains, Net 1,809 1,244 3,053 2,469
Service Charges and Fees 2,452 2,657 5,109 4,519
Wealth Management 2,223 2,058 4,281 3,474
Insurance 1,738 1,572 3,310 2,790
Other 2,261 2,803 5,065 5,025
Total Other Income 8,674 9,090 17,765 15,808
Salaries and Employee
Benefits 9,512 9,004 18,516 17,238
Occupancy and Equip.
Expense, Net 2,087 1,962 4,049 4,229
Data Processing Expense 1,164 1,249 2,413 2,127
FDIC Expense 75 75 150 149
Other 4,101 4,983 9,085 7,821
Total Other Expense 16,939 17,273 34,213 31,564
Income Before Taxes 21,186 16,605 37,791 43,874
Taxable Equivalent
Adjustment 1,068 1,117 2,185 1,978
Applicable Income Taxes 5,881 4,251 10,132 12,582
Net Income $14,237 $11,237 $25,474 $29,314
Per Common Share Data:
Shares Outstanding at End
of Period 26,083,980 25,690,880 25,690,880 26,200,529
Average Shares Outstanding
- Diluted 26,448,765 26,038,892 26,242,794 26,797,625
Net Income - Diluted $0.54 $0.43 $0.97 $1.09
Dividends Declared $0.29 $0.29 $0.58 $0.56
Book Value $13.41 $13.14 $13.14 $13.09
Market Value $36.58 $33.23 $33.23 $36.10
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2006
(Dollars in thousands)
2005
March June September December
Asset Quality Data 1Q 2Q 3Q 4Q
Nonaccrual Loans and
Nonperforming Loans $7,331 $5,944 $8,368 $11,166
Assets acquired through
foreclosure or repossession 1,536 945 1,908 3,712
Nonperforming Assets 8,867 6,889 10,276 14,878
Allowance for Loan Losses 34,339 33,525 36,093 36,572
Nonperforming Loans / Loans 0.32% 0.25% 0.35% 0.45%
Allowance for Loan Losses
/ Loans 1.48% 1.40% 1.50% 1.47%
Allowance for Loan Losses /
Nonperforming Loans 468% 564% 431% 328%
Net Loan Charge-offs
(Recoveries) 723 (455) 432 1,021
Net Loan Charge-offs
(Recoveries) (annualized)/
Average Loans 0.13% -0.08% 0.07% 0.17%
Balance Sheet (Period-End)
Assets $3,027,881 $3,095,177 $3,104,433 $3,194,979
Earning Assets 2,841,330 2,900,582 2,909,863 2,986,081
Securities 522,631 509,985 499,545 494,575
Loans, Gross 2,318,699 2,390,598 2,410,318 2,491,506
Total Deposits 2,168,932 2,208,204 2,306,604 2,418,884
Non-Interest Bearing
Deposits 404,557 409,721 417,894 435,672
NOW, Money Market &
Savings 904,809 922,923 965,625 1,050,104
CD's $100,000 and over 187,010 201,076 210,024 206,666
Other Time Deposits 672,556 674,484 713,061 726,442
Short-term borrowings 399,846 410,362 314,467 287,829
Long-term Debt 61,115 81,080 83,860 83,776
Shareholder's Equity 347,279 342,852 351,983 352,421
Balance Sheet (Daily Averages)
Assets $2,998,237 $3,061,157 $3,090,488 $3,141,728
Earning Assets 2,813,642 2,869,845 2,897,199 2,947,840
Securities 518,872 516,704 504,806 495,676
Loans, Gross 2,294,699 2,353,141 2,381,551 2,452,165
Deposits 2,157,201 2,188,288 2,269,085 2,348,991
Shareholder's Equity 353,472 347,871 351,432 353,373
2006
March June
Asset Quality Data 1Q 2Q
Nonaccrual Loans and
Nonperforming Loans $13,063 $21,824
Assets acquired through
foreclosure or repossession 3,084 2,725
Nonperforming Assets 16,147 24,549
Allowance for Loan Losses 37,402 38,575
Nonperforming Loans / Loans 0.51% 0.83%
Allowance for Loan Losses / Loans 1.47% 1.47%
Allowance for Loan Losses /
Nonperforming Loans 286% 177%
Net Loan Charge-offs (Recoveries) 670 4,528
Net Loan Charge-offs (Recoveries)
(annualized)/Average Loans 0.11% 0.70%
Balance Sheet (Period-End)
Assets $3,250,246 $3,301,896
Earning Assets 3,031,270 3,079,808
Securities 482,453 455,367
Loans, Gross 2,548,817 2,624,441
Total Deposits 2,470,151 2,496,909
Non-Interest Bearing Deposits 417,315 442,203
NOW, Money Market & Savings 1,136,810 1,169,278
CD's $100,000 and over 200,055 203,966
Other Time Deposits 715,972 681,462
Short-term borrowings 204,487 234,232
Long-term Debt 171,635 186,427
Shareholder's Equity 349,896 337,598
Balance Sheet (Daily Averages)
Assets $3,205,843 $3,282,972
Earning Assets 2,999,871 3,070,286
Securities 485,935 469,472
Loans, Gross 2,513,936 2,600,814
Deposits 2,424,946 2,494,841
Shareholder's Equity 356,341 346,351
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2006
(Dollars in thousands,
except per share data)
2005
March June September December
Profitability Ratios (annualized) 1Q 2Q 3Q 4Q
Return on Average Assets 1.87% 2.03% 1.84% 1.84%
Return on Average Shareholder's
Equity 15.86% 17.86% 16.22% 16.35%
Yield on Earning Assets (FTE) 5.84% 6.04% 6.18% 6.40%
Cost of Interest Bearing Funds 2.27% 2.46% 2.73% 3.07%
Net Interest Margin (FTE)(4) 4.08% 4.10% 4.03% 3.97%
Efficiency Ratio (FTE)(1) 45.02% 41.02% 39.02% 42.75%
Capitalization Ratios
Dividends Paid to Net Income 51.96% 48.16% 51.08% 50.69%
Shareholder's Equity to Assets
(Period End) 11.47% 11.08% 11.34% 11.03%
Leverage Ratio (2) 9.68% 9.27% 9.56% 9.50%
Risk Based Capital - Tier I (3) 10.86% 10.29% 10.73% 10.52%
Risk Based Capital - Tier II (3) 12.52% 11.89% 12.35% 12.09%
2006 Year-to-date
March June June June
Profitability Ratios (annualized) 1Q 2Q 2006 2005
Return on Average Assets 1.80% 1.37% 1.58% 1.95%
Return on Average Shareholder's
Equity 16.20% 13.01% 14.62% 16.86%
Yield on Earning Assets (FTE) 6.62% 6.81% 6.72% 5.94%
Cost of Interest Bearing Funds 3.37% 3.71% 3.54% 2.37%
Net Interest Margin (FTE)(4) 3.93% 3.82% 3.88% 4.09%
Efficiency Ratio (FTE)(1) 44.79% 45.06% 44.93% 42.96%
Capitalization Ratios
Dividends Paid to Net Income 53.53% 67.41%
Shareholder's Equity to Assets
(Period End) 10.77% 10.22%
Leverage Ratio (2) 9.28% 8.75%
Risk Based Capital - Tier I (3) 10.30% 9.78%
Risk Based Capital - Tier II (3) 11.86% 11.32%
Definitions:
(1) Recurring non-interest expense divided by recurring non-interest
income plus net interest income, on a fully taxable equivalent basis.
(2) Equity less goodwill to total assets and allowance for loan losses.
(3) Effective October 1, 1998, banking regulators require financial
institutions to include 45% of the pretax net unrealized holding
gains on available for sale equity securities in Tier 2 capital.
(4) Net interest income, on a fully taxable equivalent basis, annualized
divided by quarter to date average earning assets.
